There’s a line that smart people love to repeat, usually without thinking very hard about it:
“The problem with technical analysis is that it only looks at information from the past.”
I’ve heard this for decades. And every time I do, I laugh. Not because it’s malicious. Not because it’s stupid. But because it’s lazy.
It’s a perfect example of people repeating something they once heard, mistaking familiarity for insight.
Technical analysis only looks at the past? As opposed to what? Information from the future?
If you’ve got a time machine, I’m listening.
All Analysis Is Backward-Looking
Here’s the part no one seems to think through.
Every form of market analysis looks at the past. Every single one.
Fundamental analysis looks at past earnings, past revenues, past margins, past guidance, past economic data.
Macro looks at historical cycles and prior policy responses. Quant models are trained on historical datasets.
If future data were available, we’d all use it. Technicians. Fundamental analysts. Economists. Everyone.
The only difference is the input. Price is just the cleanest, most honest one.
Price Is Data, Not a Belief System
Price data is descriptive. What we do with it is inductive.
Charts themselves don’t predict anything. Technical Analysis is NOT a self-fulfilling prophecy. Charts describe what has happened.
The analysis comes from interpreting those descriptions, identifying tendencies, probabilities, and risks.
That’s not some fringe idea. That’s statistics.
Every forecasting discipline on Earth starts the same way: observe the past, identify patterns, and project forward with humility.
Markets are no different.
If someone truly believes using past data invalidates a forecasting method, they don’t just have a problem with technical analysis.
They have a problem with forecasting altogether.
A Heckler, Harvard, and a Time Machine
Back in 2012, I gave a talk at Harvard. I wasn’t even 30 yet.
It was my first time speaking at a university, and I showed up ready to explain why studying price behavior is the most practical way to both manage risk and make money.
I barely made it through my opening slide when someone yelled from the back of the room, “Come on. Technical analysis only looks at the past!”
Without thinking, I fired back, “As opposed to what? Information from the future? Do you have a time machine?”
The room froze. Instant regret.
I tried to recover by joking about “Back to the Future.” It was awkward. But we moved on. The presentation landed.
More importantly, it forced me to own my perspective in front of a room full of very smart people.
That moment mattered more than I realized at the time.
It helped prepare me for years of TV appearances, conference stages, and debates with professionals who were more than capable of pushing back.
Markets Are History in Real Time
As traders and investors, we are historians by definition.
We study what has already happened to understand what might happen next. Not because history repeats perfectly, but because human behavior rhymes constantly.
Fear, greed, regret, euphoria, denial. Those don’t change. The instruments do. The venues do. The technology does. Human behavior does not.
That’s why extremes matter. That’s why we talk about sentiment so much. That’s why snapbacks are violent when positioning gets one-sided.
You see it in stocks, currencies, bonds, commodities and even Crypto. Over and over again.
History isn’t something to avoid. It’s the only thing we have.
Learn From the Past or Be Ruled by It
The irony is that people who dismiss the past usually end up trapped by it.
Anchored to prior beliefs. Fighting trends. Making the same mistakes again and again.
Technical analysis isn’t about predicting the future. It’s about respecting reality.
Price is the final arbiter. Everything else is commentary.
Ignore the past if you want. Markets won’t.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs